It is no secret that employees are costly. The Human Capital Management Institute estimated that employee salaries, overtime, and indirect compensation accounted for 70% of total operating costs of an organization. This figure has increased each year since 2005. Consider this: Research firms Gartner and IMS Research estimate that between 1.5% to 3% of enterprise software solution spending is dedicated to workforce management.
It is a problem that systems intended to increase workforce utilization, reduce labour cost, and curb absenteeisms, only occupy a small portion of most organisations’ technology budgets. This suggests that many organisations are not fully utilizing the potential of workforce management. It means that most companies have an enormous opportunity to improve their business performance.
Because of its central role in achieving these goals, workforce management should be at the top of any firm’s priority list when prioritising IT spending over the next years.
Reduce your expenses
Automating employee time and calculate pay eliminates errors. This ensures that complex pay rules can be implemented quickly and accurately. Organisations can also see the full workforce usage to plan more efficiently and adjust staffing levels according to changing conditions. These improvements can significantly reduce average labour costs. Aberdeen Group research shows that companies with optimized workforce management spend 33% less unplanned overtime.
Increasing operational agility, productivity and efficiency
Automated workforce management can provide managers with more context and data, allowing them to make better decisions. The ability to quickly assign the right people with the right skills at the right time and at the correct cost will directly support an organization’s ability to meet fluctuating production goals while maintaining quality. Aberdeen group research shows that organizations using automated staff scheduling solutions average a 4% higher workforce utilization. This is a significant productivity advantage.
Reduce financial and non-compliance risk
Compliance obligations are more important for large organizations than national laws. Local ordinances, union rules and individual employment contracts are also important. Failure to comply with local ordinances, union rules, individual employment contracts and company policies can result in costly errors. An effective workforce management system allows organisations to easily and quickly demonstrate compliance and reduce non-compliance risk and associated costs.
Customer satisfaction is improved
Optimizing workforce efficiency is directly related to customer satisfaction. Aberdeen Group reports that organisations with the best workforce optimization performance are experiencing a 18% increase in customer satisfaction over all others. Another component of sustainable growth is efficient workforce management.
Improve employee morale
Automated workforce management also improves employee engagement and morale through improved transparency and better communication between managers and employees. According to the same Aberdeen Group research brief, organisations that achieve best-in-class workforce optimization performance see a 11% increase in employee satisfaction year-over-year compared with 2% for other organizations.
Organisations can reduce labour costs and streamline compliance by implementing a unified workforce management system. This allows workers to make more informed decisions, which will help them achieve their business goals. Automating time, scheduling, and absence functions can also give you a better view of labour costs and activities. This often allows organisations to discover new ways to improve their performance.
